The portfolio is valued at 156.8 million euros, reflecting a net initial yield of 7.5 per cent.
It will also be acquired with existing bank debt of 100.0 million euros, which the joint venture intends to refinance immediately after the transaction closes.
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Subject to refinancing, it is expected to produce an initial yield on equity in excess of 11 per cent.
“The transaction substantially expands Redefine International’s portfolio of assets in Germany to approximately 357.8 million pounds, representing 35 per cent of the company’s total core portfolio by value,” said [DATA RPL:Redefine International].
“The acquisition is in line with Redefine International’s stated strategy to focus on income yielding assets in the retail, commercial and hotel sectors in the UK and Germany, to generate sustainable and growing income returns to shareholders.”
The portfolio’s 56 properties total over 128,000 square metres of lettable area and comprise a mix of stand-alone supermarkets, foodstore-anchored retail parks and cash and carry stores.
The properties are well located within their respective micro markets, with 85 per cent of the total annual rental income located in western Germany and Berlin, and the remainder in eastern Germany.
The portfolio is also expected to be refinanced at approximately 50 per cent loan to value, with an all-in cost of debt of 1.80 per cent.
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Mike Watters, chief executive of Redefine International, said the acquisition, in one of the company's core markets in conjunction with its major shareholder, is a considerable achievement in a market which is highly competitive.
“The portfolio is well let, has been well managed and offers considerable scope for asset management activity. The transaction is expected to be earnings accretive in this financial year,” he added.